Question

a bicycle can be purchased on cash payment of rs. 1500. but the same cycle can also be purchased on the cash payment of rs. 350 and rest can be paid in three equal installment of rs. 400 for next three years. find the rate of simple interest.

Answer 1

Simple interest = p multiply r multiply T/100
1500 = 350 x R x 3 / 100
R = 350 x 3 / 1500 x 100
R = 0.007

Answer 2

Answer:

Rate of Simple Interest = 26.67%

Step-by-step explanation:

Cash Price = Rs. 1500 , Down Payment = Rs. 350

Payment in three installments = Rs. 400 × 3

                                                  = Rs. 1200

Total amount = 1200 + 350

                      = Rs. 1550

So, Interest paid = 1550 - 1500

                            = Rs. 50

Principal for First Month = 1500 - 350 = Rs. 1150

Principal for Second Month = 1150 - (350 + 50) = Rs. 750 (Interest will be added )

Similarly, Principal for Third Month = 1500 - (350 + 50) = Rs. 350

∴ Total Principal = 1150 + 750 + 350

                           = Rs. 2250

Rate of interest applied first month will be same throughout three years.    

$\text{So, Time = }\frac{1}{12}\text{ in years}\\\\\text{Thus, we have :}\\\\\text{Simple Interest = }\frac{\text{Principal}\times \text{Rate}\times \text{Time}}{100}\\\\50=\frac{2250\times r\times 1}{100\times 12}\\\\\text{Rate of Interest (r) = }26.67\%$